An Advanced Inventory Management System for an Affordable Price

A good inventory system should be simple enough for small businesses to understand and use in their daily operations and yet advanced enough to cover all of their business needs. It should allow them to save time and money and prevent that dreaded inventory headache that comes to business owners as they try to keep track of their many assets. And, most importantly, it should do all of this without breaking the bank.

INVENTORY CHALLENGES

Tracking inventory is an important part of doing business. It is the means by which companies remain stocked with all of the essential goods they need to sell to customers and perform daily operations. When products are sold, they must be replenished at a rate that finds a healthy balance between the extremes of overstocks and stockouts. If you have too much of an item, your carrying costs go up and you have less room for faster-selling items. If you have too little of an item, you’ll miss out on sales opportunities, your customers will be disappointed, and they will likely go to a competitor to meet their needs.

Supply and demand aren’t constant. They often change with the season and over the course of a product’s lifecycle. So successfully managing inventory means hitting a moving target. Not only that, but your warehouse staff isn’t static. Employee turnover means you have to constantly train new people on how your inventory system is set up and what processes you have in place to keep everything running smoothly. If you don't have written or video documentation, this can be quite a daunting task. And what happens if your warehouse manager or whoever else is in charge of the system ever leaves the company? Do you have more than one employee who is an expert on your system?

There’s also the problem of keeping track of inventory with different units of measure and suppliers in various countries with their own distinct tax rates and laws. And let’s not forget the challenge of keeping up with government laws, regulations, and audits. Many companies must comply with rules set forth by the Food and Drug Administration (FDA), Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and other government agencies and bodies. To fail to do so will likely result in business closure and possibly even prosecution. When there is a product recall, you will need to be able to find all of the items in your inventory that are subject to that recall and show documentation of their progression through your supply chain, warehouse, and all the way to the end user.

While it may be possible to overcome these and other problems by yourself, it’s much less stressful and faster to use an inventory management system and software to take on most of the legwork for you.

DIFFERENT TYPES OF INVENTORY MANAGEMENT

To solve these challenges, companies often turn to software that can help them track their inventory, orders, shipments, vendors, and more. Here are three systems that companies often use.

Manual – Using a manual system is often the first step for startups as they begin working with inventory and assets. A manual system can be as informal as simply having an employee remember inventory quantities, locations, vendors, and orders. Or it can be a little more formal in the sense that those things are written down on pieces of paper and kept in a notebook. The drawbacks of this type of system should be obvious. It’s easy for someone to forget key information if it’s not written down, and even if it is, there is nothing to stop someone who’s unauthorized from looking at those notes, making changes, or stealing them. And if there’s a fire or something gets misplaced or damaged, there are likely no duplicates, so that information is simply lost.

Excel Spreadsheets – Startups frequently record the inventory quantities they have on hand in an Excel spreadsheet because it’s readily accessible on any computer with Windows, so they don’t have to put a lot of money into obtaining it. It can make sense for a time, but this is only a temporary system for very small businesses. The trouble is that if the employee who created the spreadsheet and has a deep understanding of how it works ever leaves the company or even just takes a vacation, things will likely come to a standstill and get disorganized extremely fast. It is not a safe, secure way to manage inventory. Also, as small businesses grow bigger, they find that Excel lacks any advanced features they need to analyze data, spot trends in sales and supply chains, automatically update inventory records from a barcode scanner, and keep their data secure yet accessible by the right people.

Accounting Software – When small businesses try to use accounting software as an inventory system, they discover that it has a number of constraints and that it can’t meet all of their needs. It’s a great accounting solution, but it lacks many key inventory control features that companies need. That’s because it was made for bookkeeping, not inventory tracking. You wouldn’t buy a lawnmower and then complain that it does a terrible job when you use it as a blender. They both have spinning blades, but they’re made for two different jobs.

INVENTORY MANAGEMENT SOFTWARE

A better solution for tracking inventory is to find software that is affordable and robust enough for small and midsize businesses to stay with for many years. Make sure it can handle what you need it to do before making a final decision. You don’t want to have to switch systems every few years when you discover that the one you went with can’t handle more complex requirements, such as multiple locations, barcode scanning, and stages of production. That’s a waste of time and money.

Your software should have features that are simple enough for a young business to master and that can also be expanded to fit that same business’s increasingly complex needs year after year. Fishbowl is a powerful tool that fits the bill.

Fishbowl Manufacturing and Fishbowl Warehouse help you oversee multiple locations, track shipments, automatically reorder products, print and scan barcodes, convert units of measurement, use multi-currency features, create multi-level work orders, and much more. Fishbowl integrates with dozens of other business solutions, including Amazon, eBay, Shopify, Magento, QuickBooks, Salesforce, and Xero, just to name a few. So you can share your inventory data across all of your other online and desktop platforms to ensure each one has accurate, up-to-date inventory quantities and values.

WHAT TO LOOK FOR IN AN INVENTORY MANAGEMENT SYSTEM

Companies look for systems to solve logistical problems they are facing as they grow. There are certain features that will help them in this endeavor. We’ll start with basic features and move on to more complex ones in a minute. There are three basic elements every good inventory management software should contain:

Tracking items so that you know exactly what quantities you have on hand of every part and product in your inventory. This is quite possibly the most basic part of inventory management. You need to know how many items you have on hand to make informed decisions about ordering and shipping them.

Multiple locations, which allow you to designate where all of your items are located at different warehouses. You can even drill down into each warehouse and set up individual shelves, aisles, and bins to hold your items. That makes the receiving, storage, and picking processes much faster and more organized when you know where everything goes.

Units of measure like eaches, gallons, pounds, inches, cases, packages, etc. that allow you to accurately identify the quantities that are available to you. The software should also allow for unit of measure conversions, so that if you purchase a case of widgets and sell them individually, you can account for that change in how you count them in your records.

Once you have the what, where, and how much down, you can move on to more advanced features to help you manage your inventory.

Tracking lot numbers – Lot numbers let you identify a specific group of items that came from one particular order or manufacturing job. This helps you hunt down any items that might be part of a product recall or that contain a defect instead of having to throw out all of the items in your inventory because they might be affected.

Tracking serial numbers – Serial numbers help to uniquely identify an individual item and distinguish it from every other item in your inventory. For example, if you have 100 computers that are all the same model, each one of those will have a unique serial number so you can track which unit you ship to which person. There are many benefits to using serial numbers, one being it gives you the ability to track warranties and returns, and another is that you can better handle recalls.

Tracking expiration dates – Companies that work with perishable goods, such as bakeries, grocery stores, hospitals, and many kinds of retailers, need to know when their goods need to be used or sold by. Tracking each item’s expiration date allows them to make the best use of their resources and avoid spoilage and other waste.

Tracking costs – If you manufacture goods, it’s absolutely essential that you know how much your finished products cost to make. A bill of materials should add up the costs of all of the parts that go into a manufacturing job and also add labor costs and ancillary costs, such as electricity and storage space/lease expenses. This will help you price products at a level that covers all of their costs.

Receiving and landed costs – When you order items from international vendors, you will need to pay landed costs to receive them into your warehouse. These can include shipping costs, crafting, packing, and handling costs, brokerage and logistical fees, taxes, insurance, and employee wages. In addition, you may need to factor in tariffs, customs duties, harbor fees, and currency conversions. If your software has built-in features to account for all of these costs, you will save yourself a lot of time and worry.

Identifying shipments sent to customers – This might seem like a basic function, but you’d be surprised at how many companies struggle to figure out where and when they sent shipments out. Sales orders should have a fulfillment date, shipment date, shipping address, recipient, and other vital information. That way, you will know which customer each shipment was sent to on which date.

Scanning barcodes – To speed up the process of reordering items, receiving them, picking them, and performing other important functions in the warehouse, you should try using barcode scanners. Instead of hand-typing information, you can scan items’ barcodes to ensure they are recorded quickly and accurately. A barcode system empowers your workers to accomplish a lot more in less time.

Accounting software integration – A major benefit of integrating your inventory system with your accounting software saves a lot of time and headaches. It eliminates the need for double data entry. Shortly after changes are made to the inventory software, it sends those changes to the accounting software to create invoices and update the general ledger.

Ecommerce integration – A growing number of transactions are done online via ecommerce platforms. Make sure your inventory program integrates with all of the ecommerce platforms you have an account with. That way, when you sell an item on one of them, it will automatically update the others to reflect the new number of items available to purchase.

Picking, packing, shipping, and receiving – The order fulfillment process is at the heart of inventory management. Your software system should enable workers to pick in batches to save time, pack items in the appropriate containers, print shipping labels and inform shippers that packages are waiting to be picked up, and check that everything that was ordered is received when a shipment arrives.

Production stages and notes – Manufacturers need to be able to add notes to work orders and bills of materials. They can use those to insert step-by-step instructions, schematics, and other details that help workers know exactly what is required of them on each manufacturing job. This helps to manage the flow of your manufacturing process. You’ll be able to set up production stages and sub-assemblies, which allow you to know which step of manufacturing your items are in.

With Fishbowl, you can speed up your inventory processes by using barcode scanners, save money by balancing your inventory needs, and get more out of your workers by giving them the tools to be more productive. Eliminate double data entry by integrating Fishbowl's inventory software with your accounting software and other business solutions.

Convert multiple currencies into your home currency in purchase orders and sales orders to help with taxes and other calculations. And use production stages in multi-level work orders and bills of materials to make sure manufacturing jobs get done in the right order and fast enough to keep up with demand. That’s a tall order, but Fishbowl is up to the task.

EXECUTIVE SUMMARY

There are many inventory challenges, such as shortages, calculating the true costs of products, and supply chain disruptions, which can be solved by using an inventory software system. When looking for an inventory software system, make sure it has the ability to track items by lot number, serial number, and expiration date, add multiple locations, create and convert units of measure, track costs, receive items, identify shipments sent to customers, scan barcodes, integrate with accounting solutions and ecommerce platforms, add notes to work orders and bills of materials, use production stages, and facilitate the picking, packing, shipping, and receiving of items. Fishbowl is an ideal solution because it offers all of the above features, plus many others. In the end, inventory management software should save time and money, and it should be easy to use and advanced enough to fulfill all of your company’s needs. A good system solves problems and makes your inventory life easier.